Whitecap Resources (WCP.TO)

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The company has had record production and increased production guidance. There is no increase in capital expenditure. Payout ratio is 26%.The fundamentals are in the right direction. The valuation is low and fundamentals point to a buy. Unlock Premium - Try 5i Free

Like Cenovus and Arc, they had a busy 2020. WCP became the largest intermediate oil producer in western Canada. They're using carbon capture at their Weyburn unit and they may apply that clean tech to other facilities, maybe to generate revenue. It trades at a premium, because it's so well-run, low-cost, solid balance sheet with tremendous cash flow. They are aggressively reducing debt. Last year, they bought TORC Oil, a perfect merger in terms of balance sheet and assets. Buying NAL Resources was also strategic long-term. WCP is a top-tier oil producer. Boasts a strong balance sheet, so he expects them to keep paying down debt with their strong cash flow. Expects more tuck-in acquisitions to be the biggest player in this space.

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The stock has been actively acquiring companies. It is set up for good growth. Pays a decent dividend and valuation is good. Management team is competent. The balance sheet is stretched but should recover over the next two years. Unlock Premium - Try 5i Free

Damaged business model. Key risk is where you see energy price volatility, the business model doesn't make sense. It does make sense in the mid-$60 range, where we are now, which is why people are picking it up. But he favours TOU.

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Results exceeded guidance and showed growth across all metrics. There was an increase in production. Integration of their acquisitions are going well. Poised for good growth but remains relatively cheap. Unlock Premium - Try 5i Free

A big fan of the company and management. Sold it around a month ago due to relative valuation. Bought it back this year. A net negative emitter. Could get a multiple expansion. At a 6x multiple and $60 oil, it would be 63% upside. Have differentiated to acquire further gains. Bought Torc and it is still a target rich environment.

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Results were better than expected in the most recent quarterly earnings report. Cashflow and revenue declined though payout ratio is only 37% still. The merger offers good synergy. As commodity prices improve, 5i is warming up to this name. Unlock Premium - Try 5i Free

WCP-T vs. MEG-T. WCP-T is more towards the high quality side. It has performed excellently and rolled up some smaller companies. They will continue to consolidate the space and the dividend is safe. MEG-T is more leveraged to the upside. WCP-T is more of a safe haven. He prefers WCP-T.